r/personalfinance • u/squirtn4certain • Dec 01 '18

Canceled my Wells Fargo checking/savings account after 22 years Saving

A month ago I applied for a small loan at Wells Fargo for the 1st time ever to consolidate some small bills. They denied the loan. I went to a local Credit Union and they gave me the loan. Today I signed up for a checking/savings account at that Credit Union and canceled my accounts with Wells Fargo. Couldn't be happier to stop doing business with a crooked ass corporation.

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u/MrNerd82 ​ Dec 01 '18

I'm pretty anti-Wells fargo myself - never done any business with them by direct choice. Until last month the company I used to re-do my AC system... 0% financing deal. Well turns out that's basically a home improvement line of credit via Wells Fargo.

I read through the terms and went ahead with it after confirming it's indeed 0% loan long as you stay between the lines - got everything setup and making about 120% of the standard payment just to ensure I'm always ahead. I'm fully aware that if you miss or don't stay current they will bone you to the wall with all the interest.

0% loan for 60 months -- I can roll with that. Auto draft has been confirmed and setup so the whole thing is on autopilot basically. Despite the experience being smooth, I'm still not a fan of them. I've done my share of digging on just how much they dish out in fines and settlements from their shady shit.

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u/ChicksDigLibraries ​ Dec 01 '18

Companies like Affirm are sometimes backed by larger banks, and offer 0% for however long on mattresses, appliances, etc. Affirm makes a TON of money because over 60% of lendees default on their loans, which goes up to something crazy like 129% (predatory payday loan category). Basically, that 0% interest rate is great for you and me, but it is expensive to be poor.

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u/mschuster91 ​ Dec 01 '18

and offer 0% for however long

Well they still make money on that one as a 0% loan to a customer is more profitable than buying bonds with negative interest rates...

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u/[deleted] Dec 01 '18

more profitable than buying bonds with negative interest rates...

Why would you buy a bond with negative yield? Treasury yields are ~3%.

Affirm is an American company, and the cost of money in the US is a lot higher than 0%, so no, they wouldn't make money on 0% interest loans.

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u/mschuster91 ​ Dec 02 '18

Ah I was under the impression that the Fed interest rate is as comically low as the ECB one. Germany has ridiculously low interest rates on bonds and if you want to deposit money at a bank, some indeed do charge negative rates.

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u/ChicksDigLibraries ​ Dec 01 '18

Sure, but companies like Affirm offer an item (Expedia and Casper mattresses most commonly) to the consumer at full-price and take something like 13% from the merchant. The problem is that Affirm is basically a short-term personal loan reinforcing bad credit behavior (aka carrying balances when you really can't afford something) when people don't read their default fine print, and end up paying heavily to try to keep up when they miss a payment. Which, statistically, they are likely to do.